Indonesia eyes 7-8% growth from 2016

Indonesia will continue to tread a cautious monetary path over the next two years to shore up the economy’s fundamentals, but could expect to emerge with growth at 7 per cent or greater, Finance Minister M. Chatib Basri said on May 23.

“I wouldn’t be surprised if Indonesia can grow 7 to 8 percent a couple of years from now,” Chatib said at the 23rd World Economic Forum on East Asia in Manila.

The government last June raised subsidised fuel prices in order to contain the budget deficit and reduce state expenses. The central bank also raised key interest rates in order to strengthen the rupiah, which had fallen by 26 percent against the dollar in 2013, and to curb the current account deficit – which is the broadest measure of trade.

Chatib said that the government and central bank would continue with their policies, and that economic growth would likely be not higher than 6 per cent this year. The economy grew by 5.8 per cent in 2013, after expanding 6.2 per cent the year before. Indonesia’s gross domestic product rose 5.2 per cent in the January-March quarter, year on year.

“It is by design,” Chatib said at a lunch sponsored by the Lippo Group. “We need to slow down the growth, to ensure that the next administration will have a ground for better, solid economic growth.”

Chatib said in a separate interview on Thursday that he would go on vacation after President Susilo Bambang Yudhoyono’s second five-year term ended in October. Chatib started his time as finance minister in May 2013, after serving as chairman of the Investment Coordinating Board (BKPM).

Indonesia will continue to tread a cautious monetary path over the next two years to shore up the economy’s fundamentals, but could expect to emerge with growth at 7 per cent or greater, Finance Minister M. Chatib Basri said on May 23.

“I wouldn’t be surprised if Indonesia can grow 7 to 8 percent a couple of years from now,” Chatib said at the 23rd World Economic Forum on East Asia in Manila.

The government last June raised subsidised fuel prices in order to contain the budget deficit and reduce state expenses. The central bank also raised key interest rates in order to strengthen the rupiah, which had fallen by 26 percent against the dollar in 2013, and to curb the current account deficit – which is the broadest measure of trade.

Chatib said that the government and central bank would continue with their policies, and that economic growth would likely be not higher than 6 per cent this year. The economy grew by 5.8 per cent in 2013, after expanding 6.2 per cent the year before. Indonesia’s gross domestic product rose 5.2 per cent in the January-March quarter, year on year.

“It is by design,” Chatib said at a lunch sponsored by the Lippo Group. “We need to slow down the growth, to ensure that the next administration will have a ground for better, solid economic growth.”

Chatib said in a separate interview on Thursday that he would go on vacation after President Susilo Bambang Yudhoyono’s second five-year term ended in October. Chatib started his time as finance minister in May 2013, after serving as chairman of the Investment Coordinating Board (BKPM).